Under U.K. listing rules enforced by the Financial Services
Authority, a shareholder vote may be triggered if the value of
an offer exceeds 25 percent of a purchaser’s market worth,
according to the FSA regulation handbook on its website.

Potash Corp. Chief Executive Officer Bill Doyle rejected
BHP’s $130-a-share offer, describing it as “grossly
inadequate.” BHP could afford to pay as much as $180 a share
for the world’s biggest fertilizer maker, Morgan Stanley wrote
in a report today.

“It seems likely that a shareholder vote will be
required,” said Olivia Ker, a London-based analyst at UBS AG.

“BHP knows what the rules are and are unlikely to be
concerned about it,” Ker said. “It’s a health warning on value
and gives the shareholders more of a voice.”

BHP’s offer was equal to about 21.4 percent of its market
value the day before announcing the bid on Aug. 18, according to
data compiled by Bloomberg. Under FSA guidelines, should BHP
choose to raise its offer, the company’s market value would be
recalculated from the day before the new bid.

BHP shares have dropped 8 percent since Potash Corp. said
on Aug. 17 it had received a $130-a-share takeover proposal from
BHP. “The offer isn’t subject to a shareholder vote,” Illtud
Harri, a London-based spokesman for BHP, said by phone,
declining to comment further.

Gross Capital Test

A jump in Potash Corp.’s market capitalization since the
offer, which suggests investors expect a higher bid, means the
company’s value has exceeded a quarter of BHP’s worth since Aug.
20, according to Bloomberg calculations.

A higher bid of $145 a share would likely breach the FSA’s
so-called consideration test, one of four of the regulator’s key
tests to determine whether a deal needs shareholder approval,
Citigroup Inc. said in a report on Aug. 19.

A bid at that price would also breach another of the tests,
the so-called gross capital test, which measures the enterprise
value of the target company versus the acquirer, Citigroup said.

If a shareholder vote is required, BHP would need to call
an extraordinary general meeting for shareholders of both its
London-listed and Sydney-listed stock, UBS’s Ker said. The
threshold for an approval vote would be 50 percent, she said.